Freud's theory of psychosexual stages was significantly influenced by the cultural and historical context of 19th-century Vienna. During this period, Victorian attitudes towards sexuality were predominantly conservative, and discussions about sexual matters were often taboo. Freud's work, therefore, was groundbreaking and controversial, as it brought attention to sexual development as a central aspect of psychological growth. His emphasis on sexual urges was a radical departure from the puritanical norms of his time. However, this focus also led to criticisms of over-emphasizing sexual motivations in development. Additionally, his observations were primarily based on the upper-class Viennese society, which limits the generalizability of his theories. The patriarchal nature of his society also influenced his views on gender, evident in the less developed theory of female psychosexual development compared to the male-centric Oedipus complex. Freud's work is a reflection of his attempt to understand the psyche within the constraints and understanding of his era.

Contemporary psychologists often view Freud's psychosexual stages with a degree of skepticism regarding their empirical validity and relevance in modern psychology. While Freud’s theory was pioneering in acknowledging the importance of early childhood experiences on adult personality, many modern theorists criticize the lack of scientific evidence supporting his stages and the overemphasis on sexual motivations. Additionally, the stages are seen as overly deterministic, implying that personality is solely shaped in early childhood and neglecting the potential for later developmental changes. However, Freud's influence is still evident in how psychologists understand and discuss early childhood's impact on later life. His theory laid the foundation for further research into developmental psychology, even if his specific hypotheses are less accepted. Today, his stages are viewed more as a historical stepping stone in psychology rather than a concrete guide for understanding human development.

Freud's psychosexual stage theory has significant implications for understanding adult psychological issues. According to Freud, unresolved conflicts or fixations at any psychosexual stage can lead to specific personality traits or neuroses in adulthood. For instance, an individual fixated at the oral stage might exhibit dependency issues or engage in oral activities like smoking or overeating as coping mechanisms. Understanding these stages allows psychologists to trace the origins of certain adult behaviours and attitudes back to early childhood experiences. In psychoanalytic therapy, a branch of therapy developed by Freud, exploring these stages can be a key to understanding and addressing psychological issues in adults. The theory suggests that resolving these childhood fixations can lead to healthier psychological outcomes. While contemporary psychology often questions the specifics of Freud’s stages, the general principle that early childhood experiences significantly impact adult mental health remains influential.

Freud's theory of psychosexual development has been adapted and modified in various ways in modern psychological theories. Contemporary developmental psychologists have expanded upon Freud's ideas, integrating them with new research findings. For instance, Erik Erikson's psychosocial development theory extends Freud's stages into a lifespan model, emphasizing social and cultural factors alongside biological processes. Erikson's stages, which include trust vs. mistrust and autonomy vs. shame, are seen as more socially oriented and less sexually focused than Freud's. Additionally, modern theories often place greater emphasis on the role of environmental and relational factors in development, as opposed to Freud's focus on innate sexual drives. Some theorists have also attempted to address the gender bias present in Freud’s work by proposing more inclusive and gender-neutral models of development. Overall, while the core idea of developmental stages has been retained, modern adaptations tend to focus less on sexual motivations and more on social and emotional factors.

Freud's concept of fixation in psychosexual stages is closely related to his later work on neurosis and therapy. Freud believed that neuroses in adults could often be traced back to fixations at certain psychosexual stages. For example, an oral fixation might result in an adult neurosis characterised by dependency and anxiety. In his psychoanalytic therapy, Freud focused on uncovering these unconscious childhood conflicts and fixations to treat adult neuroses. He theorized that bringing these unconscious conflicts to conscious awareness and working through them could resolve the neuroses. This concept of fixation underpins much of Freudian psychoanalytic therapy, where the therapist helps the patient explore and understand their early childhood experiences and their impact on current behaviour and mental health. Freud’s approach to therapy was groundbreaking, laying the groundwork for modern psychotherapy techniques, even as specific theories about psychosexual development have been revised or challenged.